Economics

The Coinage Act of 1792 established the dollar defined at a fixed weight of gold (and silver until 1900). This was the case in the U.S. from 1792 until 1973. The U.S. was on a gold standard during this period. …Read more

Global reserves preference in fiat U.S. dollars or gold The Nikkei Asian Review reported a global financial bombshell on September 1, 2017. “China is expected shortly to launch a crude oil futures contract priced in yuan and convertible into…Read more

One way to look at central bank normalization is to envision optimum monetary and fiscal policy and work backward to what is actually possible. Optimum policy is the magic formula of stable money and low taxes. Stable money and low…Read more

The old rules for evaluating market performance no longer apply. From 1973 to 2008 one could predict market performance based on understanding the gold signal, how fiscal and geopolitical policy affected the supply and demand for base money, and how…Read more

The Fed learned from the taper tantrum that in our hybrid central bank commanded/market economy it is best not to surprise the market. This requires notifying the market far in advance of any change in Fed policy. The Fed has…Read more

The Kendall Rule “As long as excess reserves persist, with IOR, in amounts necessary to facilitate Federal Reserve control of the price of interest, the trend for the minimum price of gold is determinative by its average price over the…Read more

For the world to solve its economic problems, it needs to arrive at a consensus about what actually works in economics. More importantly, the economics profession needs to discard economic ideas that history has proven over and over do not…Read more

Part II of Money and Credit. See Part I Bernanke’s Fed upended traditional Fed operating procedures after the 2008 financial crisis. Bernanke made his academic career as a Great Depression “expert”. His belief that the GD was a monetary event…Read more

What is money? That seems like a simple question. It’s mainly the green stuff in your pocket that you want more of, but it leads to all sorts of confusion in the economic world, with harmful results. It is the…Read more

According to a study of 775 fiat currencies by Michael Hewitt, the average shelf life of a fiat currency is 27 years. The fiat dollar is at the 46 year point. It has long passed its value freshness date and is ready…Read more